Credit Card Myths Debunked 

Credit cards can get something of a bad rap. Misconceptions about how credit cards work and affect your finances can be cause for alarm – and make you think twice about getting one. But the good news is that many of the misconceptions surrounding credit cards can be debunked by the facts, and Arkansas Federal Credit Union offers credit cards that can actually help your financial health. 

Myth 1: Credit Cards Will Put You in Debt

While it’s true that irresponsible use of a credit card can put you into debt, credit cards themselves do not inherently do this. Using your credit card responsibly by paying off the balance in full each month can help you avoid interest charges and keep your financial health in check. It all comes down to managing your spending and making sure you can pay back what you owe. 

Myth 2: Credit Cards Will Hurt or Improve Your Credit

The way a credit card impacts your credit score depends heavily on how you use it. If you meet your monthly payments on time and keep your credit utilization (or how much of your credit limit you’re using) below 30%, your score can significantly improve. But if you miss payments and accumulate high balances, your credit score can drop. It’s all about being consistent and responsible in the way you manage your account. 

Myth 3: Applying for a Credit Card Will Hurt Your Credit

When you apply for a new credit card, the issuer will perform a hard pull on your credit report. This can make your credit score temporarily drop by a few points. However, this is usually a minor dip that bounces back quickly, especially if you keep up good habits. 

Myth 4: Credit Cards Come with Excessive Fees

While some do come with additional fees, this isn’t true for every type of credit card. In fact, every credit card Arkansas Federal offers comes with no annual fees. You can also avoid other potential fees by making payments on time and understanding the terms of your card. 

Myth 5: You Won’t Be Approved Without a Great Credit Score

It’s true that a good credit score can help in securing a credit card, but it’s not required – or the only factor. Lenders will also look at your income, employment status, and other financial liabilities. Arkansas Federal’s Secured Credit Card is designed to help users establish or rebuild a solid credit history, and is a great option for those with less-than-perfect credit. 

Credit cards can be a great way to build your credit, spend smarter, and even earn rewards – as long as they’re used responsibly. Understanding these misconceptions can help you make more informed decisions about using your credit card to support your financial health. Learn more about credit cards at Arkansas Federal, or stop by your local branch to talk to a team member about them today.